Play-to-earn games are about to revolutionize the gaming industry: The revenue of the NFT gaming segment skyrocketed over the course of the past year and now in 2021 makes up the biggest segment of the $22 billion market capitalization of the NFT industry. While free to play games like Fortnite and Call of duty: Warzone still dominate the market today, they might have to face the fast growing competition sooner than they would expect.
The idea of play-to-earn games is to give players full ownership over in-game items. Giving players the chance to sell the items they earned while playing for real money - potentially making a profit from gaming.
While you might now this concept from games like Counterstrike, trading items is actually illegal as they are owned by Valve, the company developing the game. But that still doesn’t stop the community from trading their in-game items and the game became (even more) famous for its weapon skin marketplaces.
Now play-to-earn games not only allow but even encourage the trading of items, making the concept in my opinion a real threat for other games.
Since the introduction of NFTs the ownership of digital assets can be tracked more easily over the blockchain - clearing the way for play-to-earn games.
The business model “play-to-earn”
While the play to earn segment is still in its infancy, a couple of projects already made a big name for themselves. Most games let you start playing for free, however there are some exceptions. The popularity of the game “Axie Infinity” for example grew so much that the prices for basic characters you need to start playing are now valued to over $1,000. While this price seems ridiculous for a beginner to just be able to play the game, it underlines the potential of the play-to-earn business model. This money is not lost, but invested into the project.
Keep in mind that people jam thousands of dollars into FIFA packs that are pretty much worthless one year later when the new game is released. Even if EA would not release any new parts of FIFA, the money you spend on coins is inevitably lost and can not be traded back into crypto or fiat currency. A powerful citation I found on the website of the play-to-earn game Gods Unchained:
If you can’t sell your Items, you don’t own them.
The concept of true ownership over in-game assets is what makes up the play-to-earn business model. Because items are tracked over the blockchain each item you acquire and mint to the blockchain is essentially turned into an NFT that you own. The decentralized structure not only makes sure that items can not be controlled by one company but also allows items to potentially outlive a game. Even after the developers decide to not uphold the game anymore, items can still be traded over crypto marketplaces; they don’t immediately lose their value or could even rise in value.
The success of play-to-earn games is not only driven by people that want to earn some money on the side while having fun playing the games. You can earn so much money that people from 2nd and 3rd world countries can literally make a better living from gaming than following a “normal” job in their country. The by far most popular game right now - Axie Infinity - has a player base with over 60% coming from the Philippines.
How much can you really earn with crypto games?
The money you can earn from crypto games depends on factors like popularity of the game, the general price development, minting fees etc. In a recent calculation the Youtuber CopperPitch came to an hourly wage of $1.49 for playing Gods Unchained, a card game similar to Hearthstone or Magic: The Gathering.
In his video he breaks down the numbers how exactly he comes up with his per hour earnings.
Keep in mind that CopperPitch is one of the highest ranked players of the game, so most people will likely end up with lower earnings. On the other hand earnings can also increase with speculation on increasing prices - for example when more people join the game and demand increases.
The way CopperPitch calculated his earnings was by first taking average prices for the different card rarities. He then looked at how many cards he received for every level-up in the game and how long it took him to move up a level.
1.25h for moving up a level
$2.10 per level
Now again, this number can hardly be compared to other games and can fluctuate depending on current market prices of items and the player's strength. What this number definitely shows however is the potential play-to-earn games have.
How do play-to-earn games make money?
Most of the games are free and if the developers let players buy items from other players rather than from the company they miss out on a lot of potential money. The way play-to-earn games make money is by selling first edition items/packs to players or by charging a commision for trading items on the marketplace. Sky Mavis for example, the core developers of Axie Infinity, charge a commision of 4.25%.
The best play-to-earn games to make money
If all of this got you interested to start playing games that let you earn real money while doing so, good news. I put together a list of the most popular play-to-earn games right now that will make you the most money on the side:
While you need a starting capital of around $1,000 for your first characters to start playing, this game is by far the most popular right now. With a marketvolume of $6,463,865 in 2020 it holds almost 50% of the whole NFT gaming segment.
The game works similar to Pokemon, where you collect, breed and battle with the so called “Axies”. The battles are turn based and can be held against the computer or with other live opponents. Players can earn SLP tokens that can be traded for fiat currencies. Some Axies have been sold for more than $600,000.
The game is available here for PC, Mac, Android and iOS.
If you are more into City building games MegaCryptoPolis is the game for you. It is the second largest Crypto game right now.
You can construct residential, office, municipal, industrial, production or energy buildings, each type producing different things a player needs to progress the game. The most valuable asset in the game are Land Plots that you need to buy to start building. Other tradable items include Pets, Citizens, Cars or different appliances for buildings. Citizens are needed to run buildings and each have unique qualifications that are passed down to the next generation.
MegaCryptoPolis runs in the web browser and requires no download, you can find it here.
Gods unchained is a free card game, similar to Hearthstone and Magic: The Gathering (fun fact: The project is led by former Game Director of Magic: The Gathering Arena). Gods Unchained is the third biggest NFT based game by market volume right now.
This is my personal favourite game on the list, so i can say if you are a fan of online card games this game is definitely for you. Starting out you get a base set of 70 cards (these can obviously not be sold) divided into six decks. By beating your opponents and leveling up you get packs and Flux. With the earned Flux you can forge the cards you draw in a pack into higher quality cards that can then be traded on the marketplace.
Right now the game is available here for PC and Mac.
Play-to-earn games already play a big role in the gaming industry and they are here to stay. While most of the popular games right now are still unpolished, I am interested to see if bigger game development companies will start their own blockchain based projects trying to take a piece of the pie.
For gamers this is great news no matter what. Earning money while playing video games is every gamers dream.